Indian equity benchmarks failed
to hold up their early gains as rally fizzled out in last leg of trade after
traders opted to book profits amid worries of high inflation and prospects of
more rate cuts that will slow growth going ahead. Markets made an optimistic
start as sentiments remained upbeat in reaction to the US Fed meeting outcome,
which came in line with the market expectations. Sentiments got a boost with
the commerce ministry's statement that India's services exports set a new
record of $254.4 billion (about Rs 19 lakh crore) in 2021-2022. It said the
exports also hit an all-time monthly high of $26.9 billion in March. Adding
more optimism, Reserve Bank Governor Shaktikanta Das said recent trade
agreements and geopolitical conditions open up potential market opportunities
for India. Traders took note of Chief Economic Adviser V Anantha Nageswaran's
statement that India's growth is expected to be in the range of 7-8.5 per cent
given the global uncertainties. Also, firm opening in Indian rupee aided the
market sentiments. Markets traded in fine fettle for most part of the day as
activity in India's dominant services sector grew at its fastest pace in five
months in April on strong demand, prompting firms to add jobs for the first
time since November, a private survey showed, but sky-rocketing inflation
remained a major concern. The S&P Global India Services Purchasing
Managers' Index rose to 57.9 in April from 53.6 in March. Adding more comfort
among traders, SBI chairman Dinesh Khara said that the surprise rate hike by
RBI accompanied with tightening of the cash reserve ratio illustrates the
flexibility with which the central bank operates, and the move will support the
markets. However, sell off in last leg of trade played spoil sports for the
markets and dragged them near neutral lines as traders are now focusing towards
earnings and upcoming macroeconomic data. Another factor is investors are
pulling out funds from secondary markets and infusing in the ongoing LIC IPO.
Finally, the BSE Sensex rose 33.20 points or 0.06% to 55,702.23 and the CNX
Nifty was up by 5.05 points or 0.03% to 16,682.65.
The US markets ended deeply in
red on Thursday as traders cashed in on the relief rally seen following the
Federal Reserve's monetary policy announcement on Wednesday. The Federal
Reserve raised interest rates by 50 basis points as widely expected, although
Fed Chair Jerome Powell was less hawkish than some had feared. Further,
concerns about higher rates, inflation, the economic outlook and the ongoing
war in Ukraine remain, contributing to the sharp pullback on Wall Street.
Besides, a sharp increase in treasury yields also weighed on the markets, the
yield on the benchmark ten-year note soaring to its highest levels in well over
three years. On the sectoral front, steel stocks turned in some of the market's
worst performances amid concerns about the outlook for global demand, dragging
the NYSE Arca Steel Index down by 6 percent to a two-month closing low.
Substantial weakness was also visible among retail stocks, as reflected by the
5.5 percent nosedive by the Dow Jones U.S. Retail Index. The index plunged to
its lowest closing level in well over a year. On the economic data front, labor
productivity in the U.S. showed a substantial pullback in the first quarter of
2022, according to a report released by the Labor Department. The Labor
Department said labor productivity plunged by 7.5 percent in the first quarter,
reflecting the largest decline since the third quarter of 1947. The steep drop
in the first quarter came after labor productivity surged by a revised 6.3
percent in the fourth quarter of 2021. Street had expected productivity to
tumble by 5.4 percent in the first quarter compared to the 6.6 percent spike
that had been reported for the previous quarter. Meanwhile, the Labor
Department released a report on Thursday showing a modest increase in
first-time claims for U.S. unemployment benefits in the week ended April 30th.
The report showed initial jobless claims rose to 200,000, an increase of 19,000
from the previous week's revised level of 181,000. Street had expected jobless
claims to inch up to 182,000 from the 180,000 originally reported for the
previous week.
Crude oil futures ended higher on
Thursday continuing to benefit from the recent proposal by the European Union
to impose sanctions on Russian oil. Meanwhile, the US dollar rebounded to its
highest since December 2002, a day after the Federal Reserve affirmed it would
take aggressive steps to combat inflation. A strong dollar makes oil more
expensive for holders of other currencies. However, upside remained capped as
the Organization of the Petroleum Exporting Countries, Russia and allied producers
(OPEC+) agreed to another modest monthly oil output increase. Benchmark crude
oil futures for June delivery added $0.45 or 0.4% percent to settle at $108.26
a barrel on the New York Mercantile Exchange. Brent crude for July delivery
gained $0.68 or 0.6 percent to settle at $110.82 (Provisional) a barrel on
London's Intercontinental Exchange.
Rising for the second consecutive
day, Indian rupee ended higher against dollar as the US Fed Chairman Powell
pushed back against a steeper 75 basis points rate hike in the coming months. Traders
also took support as activity in India's dominant services sector grew at its
fastest pace in five months in April on strong demand, prompting firms to add
jobs for the first time since November, a private survey showed, but
sky-rocketing inflation remained a major concern. The S&P Global India
Services Purchasing Managers' Index rose to 57.9 in April from 53.6 in March. On
the global front, euro pulled back from a one-week high against the U.S. dollar
on Thursday after German industrial orders fell more than expected in March,
signaling Europe was facing growing headwinds from the war in Ukraine. Finally,
the rupee ended at 76.33 (Provisional), stronger by 7 paise from its previous
close of 76.40 on Wednesday.
The FIIs as per Thursday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 17192.16 crore against gross selling of Rs 20059.41 crore,
while in the debt segment, the gross purchase was of Rs 449.74 crore with gross
sales of Rs 506.84 crore. Besides, in the hybrid segment, the gross buying was
of Rs 30.10 crore against gross selling of Rs 24.69 crore.
The US markets ended sharply
lower on Thursday amid weak earnings and fed rate hikes fear. Asian markets are
trading mostly in red on Friday after a 425-basis point lift in Bank of
England's inflation forecast for 2022 as it raised key rates to their highest
since 2009 rattles Wall Street. Indian markets managed to halt a three-day
losing streak on Thursday but lost steam in the final hours of a session that
began on a strong note amid positive global cues. Today, domestic indices are
likely to get gap-down opening amid sell-off in the global markets. Traders
will be concerned as India Ratings said inflation, supply chain disruptions and
a weak consumption demand could upset the revival in credit growth in the
medium term. It said the reversal of the interest rate cycle--marked by the
Reserve Bank of India's 40 basis points increase in policy repo rate--would
weigh down credit growth as borrowings become costlier. There will be some cautiousness
as consequent to the 40 basis point hike in the repo rate announced by the
Reserve Bank of India (RBI) on Wednesday, large banks such as ICICI Bank and
Bank of Baroda have raised their lending rates by an equal amount on loans
linked to the external benchmark. However, some respite may come later in the
day as commerce and industry minister Piyush Goyal said all the key indicators
such as jump in exports and high GST collection in April reflect that the
country's economy is on the growth path. He said that goods and services
exports have touched $675 billion in 2021-22, while the GST (Goods and Services
Tax) collection in April touched the highest ever level of about Rs 1.68 lakh
crore, up 20 per cent from the year-ago period. There will be some buzz in
telecom industry stocks as latest data published by the telecom regulator Trai
showed that telecom service providers' gross revenue declined by 2.64 per cent
to Rs 69,695 crore in December 2021 quarter. Sugar industry stocks will be in
focus as industry body Indian Sugar Mills Association (ISMA) said India has
exported 7 million tonnes of the sweetener so far in the ongoing 2021-22
marketing year, and exports from the country may touch a new record of 9
million tonnes. There will be some reaction tea industry stocks as latest Tea
Board data showed that tea exports declined by 2.4 per cent to 184.35 million
kg during the April-February period of the last fiscal. The shipment of the
crop was at 188.91 mkg in the corresponding period of the previous year.
Infrastructure industry stocks will be in limelight as Minister Nitin Gadkari
said the road transport and highways ministry aims to construct a record 18,000
km of highways in 2022-23 at a pace of 50 km per day. There will be some
important earnings announcements too to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,682.65
|
16,574.44
|
16,868.29
|
BSE
Sensex
|
55,702.23
|
55,355.10
|
56,308.08
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
NTPC
|
333.96
|
158.45
|
156.71
|
160.46
|
Oil & Natural Gas Corporation
|
268.78
|
165.00
|
162.80
|
167.80
|
ITC
|
179.32
|
262.00
|
259.86
|
264.66
|
State Bank of India
|
141.30
|
480.00
|
474.44
|
489.79
|
Axis Bank
|
127.26
|
700.65
|
692.44
|
715.34
|
Wipro and VMware Inc. have expanded collaboration that will enable customers to achieve the cloud freedom they desire with the enterprise control they require as they execute their digital strategies.
Tata Steel is planning to install Electric Arc Furnaces (EAF) in north, south and west India that will use scrap as an environmentally friendly step.
SBI is mulling to raise long term fund in single/multiple tranches under Reg-S/144A, up to $2 billion through a public offer and/or private placement of senior unsecured notes in US dollar or any other convertible currency during FY23.
L&T's construction arm -- L&T construction has been awarded yet another contract in the Bullet Train Project.